Response to gross mortgage lending figures: “It’s the morning after the night before”

New figures from the Council of Mortgage Lenders have revealed that gross mortgage lending in March jumped by almost 60% year-on-year to £25.7 billion – the biggest March figure since 2007. Our Co-Founder and Director Ian Thomas made the following comments:

Ian Thomas, Co-Founder and Director, LendInvest

Buy-to-let was a key driver behind the sharp year-on-year increase in gross mortgage lending. Landlords across the country fought tooth and nail to get deals completed by 31 March so that they could avoid the higher Stamp Duty charge for second and additional homes.

However, it’s now a case of ‘the morning after the night before’. The Stamp Duty change means building a property portfolio is simply a much tougher financial task for would-be amateur landlords.

Buying five properties at £150,000 each would previously have cost a landlord a total of £2,500 in Stamp Duty. Today those same five properties would cost a landlord £25,000, ten times more.

Things will get even tougher next year, when the changes to the tax relief available on buy-to-let mortgage interest begin to be phased in.

That said, we believe that professional landlords that are able to buy well in strong locations will continue to thrive, through careful financial planning.